15 Sep 2015
New publication: Corporate debt securities market in Poland: state of art, problems, and prospects for development
The development of the Polish corporate bonds market resulted from changes on the supply side. When the Lehman Brothers went bankrupt, Polish entrepreneurs realized that financing their companies’ operations only with the use of credit, even if contracted from different sources, might not be the best idea. Consequently, Polish business turned to debt instruments – said Piotr Kowalski, one of the keynote speakers during the mBank - CASE Seminar no. 136.
In the publication, which is an extended and authorized version of presentations delivered during the abovementioned seminar, the authors discuss various aspects of the corporate debt securities market in Poland. Piotr Kowalski gives a synthetic presentation of the subject of the analysis, Agieszka Gontarek presents selected domestic regulations and factors, and Tomasz Gałka writes about selected consequences of excessive burdens.
As Piotr Kowalski, Head of the Warsaw Office of Fitch Ratings, emphasizes in the first part of the publication, the situation on the Polish market is shaped primarily by banks, which are flotations’ organizers and guarantors, as well as by enterprises, which treat corporate bond as a kind of deposit, which is almost equally safe but yields slightly higher profits. Discrepancies are also noticeable in terms of maturity – in the case of bonds issued in Western countries, they need 5-7 years, whereas they only need 3 years in Poland.
In the second part Agnieszka Gontarek, director of the Cash Market Department at the Warsaw Stock Exchange, presents the mechanisms and characteristics of the ‘Catalyst’ market. As she explaines, its creation in September 2009 was preceded by a huge debate about its pros and cons. Many experts maintained that the corporate bond market should be reserved to banks and not to the Warsaw Stock Exchange. Yet, the arguments for Catalyst were the ones who won. Among the advantages of the solution, Agnieszka Gontarek evokes better access to bonds on the secondary market (if investors wish to cash their bonds they do not have to wait until the maturity date), flotation standardization, which improves the issuer reliability and creditworthiness, and quotation on the organized market, which is always better than the one on the OTC market.
In the last part of the publication, Tomasz Gałka, director of Debt Capital Markets at mBank S.A., discusses selected consequences of excessive burdens and the evolution of the corporate bonds market in Poland. He summarizes the publication on a positive note, stating that - although the sentiment on the market is a challenge - the corporate market will grow, and the growth should mainly be expected in the segment of mid-caps.
To find out more about the banking union, please download the publication, the contents of which were presented during the 136th mBank-CASE Seminar: “Corporate debt securities market in Poland: state of art, problems, and prospects for development”, which took place on 5th of March 2015. (WATCH THE SEMINAR ONLINE).
* mBank–CASE Seminar Proceedings are continuation of PBR–CASE and, since 1998, BRE Bank–CASE Seminar Proceedings Series.
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